Tether is expanding the use of token gold. The company has connected Tech Gold (XAUT) to the encrypted lending platform, Ledn, and plans to launch the XAUT-backed loan service later this year to provide the user with liquidity without selling gold.

XAUT will be added to the Ledn collateral.

Ledn indicates that the platform has begun to support XAUT and to include it in the range of assets that can be supported with Bitcoin and USDT. It is planned that XAUT-based lending will go online later this year.

For Tether, this means that its gold reserves are no longer only used to support the issuance of coins, but are also beginning to enter the lending landscape. For holders, the use of XAUT also extends from holding and exchange to mortgage financing.

Tether claims to have some $23 billion in gold.

According to Tether, the company currently holds approximately $23 billion in in-kind gold to support the movement of XAUT. The gold is about 140 metric tons, making it one of the world's largest gold-holding enterprises.

Traditional gold collateral finance is usually dominated by central banks, large financial institutions or precious metals traders. Tether, along with Ledn, tried to move such operations into a chain-based asset system, making tokenization of gold, like bitcoin, a digital collateral that could be used directly for financing.

  • Each XAUT corresponds to 1 ounce of gold
  • Related physical gold is stored in the Swiss vault.
  • Tether said it had about $23 billion in gold reserves.

Borrowing model by reference to bitcoin mortgage

Ledn has been providing a bitcoin mortgage for the past few years. It stated that the customer collateral would be held at 1:1 and would not be loaned or used to generate revenue. This expression is intended to be distinguished from the multiple lending platforms that fell during the encryption market crisis of 2022.

The CEO of Tether, Paolo Ardoino, stated that as the role of digital assets in the global economy increased, the market demand for products that balanced long-term holdings with financial flexibility was increasing.

In addition to the gold business, Tether has also expanded its investment in recent years, involving Bitcoin mining, renewable energy and AI Infrastructure, Northern Data. Previously, Tether also invested in the precious metals trading platform Gold.com and worked with the encryption finance company Antalpha to promote the use of XAUT in the context of lending and in-kind redemption.